MoD to buy £3bn armored vehicle fleet from Germany – report

The British Army is set to buy up to 800 infantry vehicles from Germany at £4 million ($4.9mn) apiece in a deal that could cost taxpayers dearly in the long run, The Times reports.

The military is desperate to upgrade their existing armored fleet, which currently consists of old machines produced in the 1960s, and has been trying to set up a deal, unsuccessfully, for the past two decades. The Ministry of Defence (MoD) now wants to sign a contract with Germany’s ARTEC consortium as quickly as possible, which would rule out any possible competition, according to a report in The Times which cited unnamed defense industry sources.

The urgency is driven by the fact that three attempts at buying vehicles have already been made at a cost of £300 million ($366mn), none of which resulted in any new hardware. Delays were caused by budget cuts and internal disagreements about whether the armor ought to be light (and therefore more mobile) or heavy. Should the deal with ARTEC go ahead, the outdated FV430 and Scimitar vehicles will be replaced by Boxers, a large, eight-wheeled model developed in the 2000s.

The fall of the pound to a 31-year low since the Brexit referendum in June, has also raised fears that any military purchases made over the course of the next five years will cost up to £2 billion ($2.44bn) more due to inflation. Therefore the MoD wants to push through the German deal as soon as possible to avoid facing further costs.

However, rushing into the contract without exploring other possible options may mean the MoD loses out on some better offers. For example the Piranha V, an American vehicle developed by General Dynamics, is believed to cost up to 40 percent less.

“The MoD is at risk of making a very poor decision, and making it for all the wrong reasons,” a defense industry source told the Times. “A single-source contract would be pursued only because it’s an easy and quick option.” The source claimed that a competition could be timely and save taxpayers “up to 40 per cent on a £3 billion ($3.66bn) programme”.

“The army is in a rush because this has taken decades,” said another insider. “It is nervous the money will go and then the heart of the transformation of the army that [Chief of Staff General] Nick Carter has in mind is in jeopardy because they are going to have a force that doesn’t fit together.”

Lithuania has recently purchased 88 Boxer vehicles from Germany in April for 386 million euros, the largest sum ever paid by the Lithuanian Armed Forces. The Baltic country has increased its defense budget by a third since 2014, in response to growing tensions with Russia over the Ukraine conflict